This study estimated average annual soil loss and clarified its spatial distribution and impact on reservoirs in the upper Mekong River basin in Yunnan Province, China. A quantitative grid-based estimation was made using a Universal Soil Loss Equation model in a geographic information system framework, along with remote sensing and other source data. The results suggest that the average annual soil loss in most of the area ranged from 0 to 2853 t/ha/y, with a mean value of 19.8 t/ha/y. We estimated that a little more than half (61.0%) of the study area undergoes minimal erosion; this was primarily observed in the south, and more particularly in the southeast portion of the study area. Almost one fifth (19.2%) of the study area was estimated to undergo low erosion; this was primarily found in the central and southwest portions of the study area. Moderate soil erosion was observed in 8.5% of the study area. We estimated 11.3% of the study area to undergo high or extreme erosion; these locations were concentrated in the northern part of the study area. Soil erosion appeared most frequently at the mean elevation and mean slope zone. Dams on the upper reaches were found to be threatened by the presence of sediment.